by admin | Nov 24, 2016 | Charity & Not-for-Profit Law, Expertise
On October 27, 2016, the Mowat Centre, which describes itself as “Ontario’s Voice on Public Policy” (“Mowat”) released a report titled, “Unpacking Impact – Exploring Impact Measurement for Social Enterprises in Ontario,” (“Report”). The Report examines the challenges with developing effective impact measurement practices for social enterprises and provides specific recommendations to assist social enterprises in Ontario. Measuring the social impact of social enterprises is stated by Mowat to be a “persistent challenge”, but at the same time is “critical for building confidence, demonstrating accountability among potential funders and investors.” In preparation of the Report, Mowat undertook in depth literature reviews, informant interviews, and consultations with practitioners both in Ontario and globally, and in doing so identified a number of challenges, areas for improvement, and recommendations for improving impact measurement practices.
Some of the challenges that Ontario social enterprises face with respect to the quality and consistency of their impact measurement practices identified by Mowat include: capacity (e.g. lack of time, skills, resources), inconsistent and unreliable data, inaccessibility to privately held data, lack of funding for intermediaries, lack of funding specifically for impact measurement, inability to locate and implement certain methodologies and tools, lack of interpretation of intangible outcomes (e.g. qualitative data), undervaluation of impact measurement generally, cultural and philosophical differences, and a lack of uniform policies and impact measurement standards.
After identifying a number of the challenges of impact measurement, Mowat then listed a number of the leading global practices, but at the same time was careful to point out that one size does not necessarily fit all. Some of the key themes identified in the global practices, which Mowat suggests could be a “good starting point for Ontario”, include: developing a universal process that is flexible and adaptive, starting measurement with basic principles (e.g. what do you do, for whom, and why), the act of measurement visibly contributing to good management, allocating time and money on measurement that is useful and appropriate, balancing the costs against the benefits, and agreed upon indicators with key stakeholders, amongst other things. The Report further indicated that the key conditions for success include reliable data, technology, funding and capacity.
Mowat concluded its Report by making a number of recommendations for improving impact measurement practices for social enterprises in Ontario, which include: building from the bottom up and identifying a “backbone organization” that would “act as an advocate, convener, educator, and centralized resource library,” developing common practices based on international best practices, aligning key stakeholders on a common practice, prioritizing training, learning, and capacity-building, investing in shared infrastructure, providing funding specifically for impact management, in addition to establishing pilot projects to develop sector-specific impact measurement procedures. The Mowat Report is a very useful resource tool for anyone interested in learning more about the developing trend of social enterprises and their impact in Ontario.
by admin | Nov 24, 2016 | Charity & Not-for-Profit Law, Expertise
On November 10, 2016, Canada Revenue Agency (“CRA”) posted a response to an inquiry received by a registered charity (“Charity”) regarding the application of Goods and Services Tax and Harmonized Sales Tax as it relates to overnight camps designed for individuals who have a disability. In this regard, CRA was asked by the Charity whether a particular medical condition (not disclosed in CRA’s response) was considered a disability under the Excise Tax Act [“ETA”]. This inquiry was made to determine whether paragraph 1(f) of Part V.1 of Schedule V of the ETA, applied to the Charity’s camp. Subparagraph 1(f)(ii) outlines an exception from an exclusion to an exemption from H.S.T. for recreational or athletic activities where such “services, memberships or rights supplied by the charity are intended to be provided primarily to individuals who are underprivileged or who have a disability.” In other words, a Charity providing services that fall under paragraph 1(f) would generally have to charge H.S.T on the recreational or athletic activities provided unless they are provided to individuals who are disadvantaged and/or disabled and fall within the exception. Based on the facts presented, CRA ruled that the Charity’s supplies of services provided as part of the camp were exempt under section 1 of Part V.1 of Schedule V.
In its response, CRA indicated that “disability” generally “refers to a long-term impairment that restricts an individual in carrying out his or her activities of daily living,” which can include congenital disabilities, disabilities as a result of an injury, neuromuscular disorders, or disabilities resulting from conditions such as “Cerebral Palsy, paraplegia, amputation, pulmonary disease, heart disease, arthritis, diabetes, and back disorders.” When considering whether subparagraph 1(f) (ii) of Part V.1 of Schedule V applies to camps designed for individuals who have a disability, CRA indicated it is not necessary to consider whether the individuals attending the camp in fact have a disability. Instead, CRA considers the “charity’s intention in providing the camp” and examines the camp as a whole. A few of the factors CRA takes into consideration include; “the purpose of the organization/program as set out in its governing documents,” “the nature of the activities provided,” “the qualifications of instructors/staff,” “whether healthcare services are provided as part of the program” as well as other criteria. In its closing comments CRA also noted that “whether an individual is eligible for the income tax disability tax credit is not relevant for purposes of subparagraph 1(f) (ii) of Part V.1 of Schedule.” This interpretation will be helpful for charities that offer camp services to beneficiaries with a disability to determine the application of GST/HST to their services.
by admin | Nov 24, 2016 | Charity & Not-for-Profit Law, Expertise
On October 31, 2016, the Ontario Superior Court of Justice issued its decision in Lash v Lash Point Association Corp. Lash Point Association Corporation (“LPAC”) is a not-for-profit corporation which holds 30 acres of cottage property, called Lash Point, on Lake Rousseau in Muskoka. Various Lash family members transferred their interests in the property to the corporation in 1996. This case deals with the significant disagreements about the future of the LPAC as some family members wish to “realize on the fair market value of their interest in Lash Point” while others “want LPAC to continue so that they and future generations can continue to enjoy Lash Point.”
In this regard, the group wishing to retain ownership proposed to buy out those wishing to leave, while those wishing to leave preferred to have the corporation wound up and the entire property sold. Both sides attempted to apply different remedies under the Canada Not-for-profit Corporations Act; either a court ordered winding-up in the case of those wanting to sell the property; or the broad authority the court has under the CNCA to construct an appropriate remedy in the case of those wishing to remain.
The court considered each side’s position before deciding that the test was not met for a court ordered wind-up after considering the leading cases on such a remedy in the for-profit context. The court largely accepted the draft buyout agreement proposed by those wishing to retain ownership with some changes and appointed a receiver to oversee the buyout.
The decision is of interest since the analysis of the court considered many of the provisions of the CNCA in light of previous decisions concerning for-profit corporations. The analysis of the court concerning the membership remedies discussed will be of value in future cases dealing with membership remedies under the CNCA.
by admin | Nov 24, 2016 | Charity & Not-for-Profit Law, Counter Terrorism Law, Expertise
Canadian Government Consults on National Security Green Paper
The Canadian Government will be consulting with the public until December 15, 2016, on key elements of Canada’s National Security framework in an effort to ensure that it reflects “the rights, values and freedoms of Canadians”. Participation in the consultation is being accepted online, by email, by mail and in-person. In-person events are listed on the consultation webpage. The consultation is based on Our Security, Our Rights: National Security Green Paper, 2016 (“Green Paper”), which is a publicly available document intended to prompt discussion of and providing background information for the key topics of the consultation. The government released a backgrounder detailing the topics for discussion on September 8, 2016. The ten key topics are: accountability, prevention, threat reduction, domestic national security information sharing, Passenger Protect Program, Criminal Code terrorism measures, terrorist entity listing procedures, terrorist financing, investigative capabilities in a digital world, and intelligence and evidence.
FATF Ratifies New Evaluation Methodology for State Regulation of Non-Profit Organisations
From October 19, 2016 – October 21, 2016 the Financial Action Task Force (“FATF”) held its plenary meeting, at which it ratified changes to its evaluation criteria in order to take into consideration the changes made to Recommendation 8. The FATF is an inter-governmental body responsible for setting and monitoring international standards for combating money laundering and financing of terrorism and proliferation. The changes in FATF’s evaluation methodology can be found on pages 117-119 of its Methodology Handbook, where new criteria are added for the assessment of Immediate Outcome 10 to ensure that countries use the new proportionate risk-based approach to regulation of non-profit organisations. Information on the changes to the FATF’s Recommendation 8 and its Interpretive Note can be found in our Anti-Terrorism and Charity Law Alert No. 46.
by admin | Nov 24, 2016 | Charity & Not-for-Profit Law, Expertise
Over the last 12 months there have been a significant number of legislative and common law developments at the federal and provincial level that impact how charities operate in Canada. The intent of this paper is to provide a brief overview of some of the more important developments in the last year, including changes introduced through the 2016 Federal Budget, changes to the Income Tax Act (“ITA”) involving estate gifts, new publications from the Charities Directorate of the Canada Revenue Agency (“CRA”), corporate updates under the Canada Not-for-Profit Corporations Act (“CNCA”) and the Ontario Not-for-profit Corporations Act (“ONCA”), other federal and provincial initiatives, as well as recent court decisions affecting charities.
The balance of the paper on this topic that was presented at the Law Society of Upper Canada on November 4, 2016 can be found here.
by admin | Nov 24, 2016 | Charity & Not-for-Profit Law
The popular Legal Risk Management Checklist for Ontario-Based Charities, as well as the Legal Risk Management Checklist for Ontario-Based Not-for-Profits updated as of November 2016 are now available through our website at https://www.carters.ca/.
